Automakers Will Slash EV Battery Prices in Half: Will This Give the Plug-In Car Industry a Boost?

By | November 04, 2013
Electric cars have been making slow--painfully slow--but steady progress in the U.S. during the past few years. Plug-in cars made up 0.58 percent of the auto market during the first nine months of the year, up from just over 0.3 percent in 2012. But a new study by PricewaterhouseCoopers reveals a potential for more EV car sales in the future. The consulting firm predicts that the cost of EV batteries will decline rapidly by the end of the decade, which could help bridge the gap between gas and electric-powered cars. The "Battery Update" report surveyed automakers, LG, Samsung, and other battery suppliers to study trends for battery prices in the future. The consensus? Economies of scale will dramatically drive down prices. Currently, batteries cost around $600 per kilowatt, or around $12,000 in total. This is $10,000 more expensive than a combustion engine. By 2020, however, the price per kilowatt is expected to drop to $300. Not only will this make EV driving more practical, but it will also help make these models more competitive against their gas-powered counterparts. PWC said that in order for battery prices to drop, the EV market will need to grow between 2.5 and 3 percent each year. This should not be a problem, since the current growth rate is around 5 percent.
EV makers are already dropping prices on many of their vehicles. Chevrolet slashed prices on the Volt by $5,000 for the new model year, and the Nissan Leaf is now available for well under $30,000. Honda also dropped lease prices on its Fit EV to just $259 a month. But dropping prices does not eliminate one common fear among would-be EV buyers - range anxiety. Just like now, automakers will likely offer an array of EV choices. They will continue to build cheaper models with low ranges, such as the Leaf, as well as more expensive models that travel farther, like the Tesla Model S. Sources: CNNMoney Fortune

If battery costs are currently $600/kWh then the Tesla Model S' battery would cost $51,000.  Clearly this article is hogwash.